Capital Markets Overview !

[Nick Bednarczyk]

Capital Markets Commentary – September 10, 2024

Good Morning! Here is a quick update on the market for you:

Fed's almost certainly going to cut rates this month—traders are split on how big it'll be though.

Odds are at 75% for a 25-basis point cut and 25% for a 50-basis point cut. Over the next year, around 250 basis points of cuts are expected. If cuts don’t boost the economy enough, we might see shorter-dated Treasuries rallying more. Mortgage rates have been falling for four weeks, now about 90 basis points lower than last year!

Key things this week: Inflation Data

CPI drops tomorrow, PPI on Thursday—lower gas prices might cool these numbers a bit. Consumer sentiment is expected to improve with inflation easing. No Fed speakers this week since we’re in the quiet period before their meeting.

We saw wholesale inventories tick up by 0.2% in July and consumer credit jumped more than expected. Treasury’s kicking off bond auctions with a $58 billion 3-year note today. Yields are hovering around recent lows, with the 10-year at 3.697%. Stocks dipped last week after labor data disappointed. Small business optimism is down, mostly due to high inflation and weakening demand. All eyes are on tomorrow’s CPI for any hints of what's next for the market and the Fed's rate moves.

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